Arizona Governor Vetoes Bill to Create State Bitcoin Reserve

Highlights:

• Katie Hobbs, Arizona Governor, has blocked a bill that would allow the state to be the first to create a crypto reserve.
• Lawmakers remain divided over using public funds to invest in cryptocurrencies.
• Over 35 states are still exploring laws that will allow them to invest in cryptocurrencies.

Arizona Governor Katie Hobbs has officially vetoed a bill that would have permitted the state to invest in digital assets such as Bitcoin, halting plans to create a state-run reserve. The legislation, known as House Bill 2616, passed a final vote in the Arizona House with 31 members in support and 25 opposed. The proposal aimed to form a digital asset strategic reserve and allow investments from seized funds under state control.

JUST IN: 🇺🇲 ARIZONA Governor Katie Hobbs has VETOED the State's Strategic Bitcoin Reserve Bill.

"Arizonan's retirement funds are not the place for the state to try untested investments like virtual currency." pic.twitter.com/0Yhded9f7B

— Fiat Archive (@fiatarchive) May 3, 2025

Governor Hobbs stated that the bill involved unverified investments and could lead to major financial risks for the state. She explained that digital currencies lack stability and that the bill provided no clear direction on managing the reserve. According to her message, Arizona’s public retirement funds remain strong because they rely on informed financial decisions, not experimental ventures.

In her written statement to Senate President Warren Petersen, she mentioned that using state-managed funds for investments in virtual currencies poses unnecessary risks. She also maintained her earlier position that she would block any legislation not tied to a bipartisan solution for disability funding, which added to her decision.

Any bill not already on my desk will be vetoed until we have a serious, bipartisan funding solution that protects health care for Arizonans with disabilities.

— Governor Katie Hobbs (@GovernorHobbs) April 17, 2025

Lawmakers Divided Over Use of Public Funds for Crypto Investments

Supporters of the bill argued that a strategic reserve would have helped Arizona attract technology firms and position itself as a hub for blockchain innovation. In addition, they highlighted the growing adoption of digital assets by major institutions and foreign governments as reasons to support the bill.

Meanwhile, opponents argued that public funds should not be used on assets that are volatile. They pointed out the lack of clear supervision mechanisms and management rules for the proposed reserve. The governor had similar concerns, as she stated the legislation offers no details.

A related proposal, SB1373, titled Digital Assets Strategic Reserve Fund, is progressing through committees. However, it has not reached a final vote and may now face delays due to the rejected bill.

Arizona is now among a growing number of states where similar plans have either failed or been delayed. Earlier this year, Oklahoma’s version of the Bitcoin Reserve Act stalled in committee. Likewise, attempts in Montana, North Dakota, and Wyoming also lost momentum during the first few months of the year.

Other States Continue to Explore Crypto Legislation

Even though Arizona’s proposal did not succeed, discussions around digital asset investments are continuing across the United States. According to Bitcoin Laws, a firm tracking bills that are related to cryptocurrencies, over 39 bills are in different stages of review in about 20 states. These efforts vary in scope and approach, with most focusing on how public funds might interact with approved cryptocurrencies.

Meanwhile, national conversations around digital asset reserves are gaining attention as well. A recent executive order by former President Donald Trump proposed the creation of a strategic Bitcoin reserve and a digital asset stockpile, which has added momentum to state-level initiatives.